Bank rate cut

News

The CBI and EEF today responded positively to the news that the Bank of England’s Monetary Policy Committee has cut the UK bank rate to 1.0 per cent.

The Bank of England’s Monetary Policy Committee today voted to reduce the official bank rate paid on commercial bank reserves by 0.5 percentage points to one per cent.

In a statement, the bank said that the global economy is in the throes of a severe and synchronised downturn and that output in the advanced economies fell sharply in the fourth quarter of 2008.

It added that growth in the emerging market economies appears to have slowed markedly.

In the UK, output dropped sharply in the fourth quarter of 2008 and business surveys point to a similar rate of decline in the early part of this year.

Credit conditions faced by companies and households have tightened further.

The bank added that the underlying picture for consumer spending appears weak.

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